Happy Tax Day!

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1. Two stories, one of which is true and one may be relegated to the area of legend:

   1. When I was working with a local firm in Atlanta in the mid-90s, a client had recently sold his meatpacking plant that he started from scratch to a big agribusiness. We did an installment sale but his upfront tax bill was still more than $1M. I remember this older guy with real loud western wear (his wife ran a western clothing store with her spare time and money) come in to write a paper check to the IRS for that $1M. His hand was really shaky (and I think it had nothing to do with age, but rather the size and the payee of the check) and he didn’t plan his space on the amount line wisely so he had to really cram the last few words before 00/100 in there. He handed over the check, and we proceeded to do everything possible to screw up the MICR line, including run strong magnets over the magnetic printing, staple through the printing and remove the staples, etc. before attaching the check to the return (in the days before 1040-V). We like to think we earned the client several thousand dollars worth of interest in float for the extra time it would have taken to manually process the check and return.

   2. In my first stint with a Big-4 firm, I heard that back in the day, if there was a client with a big bill to pay on April 15, the firm would collect those returns and checks a few days earlier and fly a staff person up to Alaska to find the remotest possible mailbox to file the returns on April 15, thus saving those clients thousands and thousands in interest during the time those returns were en route from Podunk, Alaska to the appropriate IRS processing facility. Allegedly this kind of abuse led to changes in the regulations dealing with the “mailbox rule”. Even if apocryphal, I think it makes a good story.

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